A new generation of opportunity

Walk down the long rows of melons, peppers, tomatoes, pumpkins,
flowers and other agricultural products at the Clearspring Produce
Auction and you'd think a megafarm is behind the bounty.

Not so. About 40 small farmers—many of them Amish—pooled their
ideas and resources to establish this growing LaGrange County growers
association, which rang up about $430,000 in sales in 2002.

Although the auction is another way for the partnering farmers
to sell their produce, the growers association is more about survival,
says Steve Western, Clearspring's manager.

“The Amish want to farm 20 acres of corn and milk 15 cows, and
that doesn't cut it anymore. You've got to be bigger,” Western
says. “For these Amish boys to stay on a 60- or 80-acre farm, they're
going to have to diversify with this produce. This is the up and
coming thing.”

As Clearspring developed into a regional agricultural business,
its partners have increasingly turned to Purdue University for
technical and management advice. To help other producer groups
statewide also get off on the right foot, Purdue Extension specialists
and county educators have formed the New Ventures Team.

The team is made up of Extension specialists in agribusiness marketing,
consumer economics, community development, food processing and
rural business development, as well as Extension educators from
13 Indiana counties.

The team's mission is to provide educational information and other
services to Hoosier producers interested in starting value-added
and alternative agricultural businesses. “There are lots of different
reasons for Extension to be involved in value-added enterprises,” says
Steve Engleking, Extension educator in LaGrange County and a New
Ventures Team member. “One is the profitability of the small farm.
Small farms usually employ part-time people. They probably have
as much or a greater need for education than some of the larger
farms, which tend to turn to fertilizer and seed dealers for technical
advice.”

Small farms also strengthen national security—an important issue
in these troubling times. “A decentralized food system is harder
for terrorists to attack,” says Engleking, who's worked with Clearspring
the past three years. “It's also good for the overall economy.
Small businesses employ most of the people in this country.”

New generation cooperatives, or NGCs, are springing up across
the nation, says Joan Fulton, New Ventures Team co-chairperson
and an associate professor in Purdue's Department of Agricultural
Economics. Several producer groups in Indiana are close to forming
NGCs or partnerships of another form, including operations that
would sell freezer beef directly to consumers, produce ethanol
and process corn into masa flour.

“There are people in Indiana saying, ‘Let's see what's available
in terms of value-added processing of the products we produce,'” Fulton
says. “Members of our team are already working with some of those
groups.”

Agricultural cooperatives have been around for decades. According
to the Center for Cooperatives at the University of California
, there are more than 4,000 ag co-ops in the United States , with
an annual total net business volume of more than $89 billion.

NGCs share many characteristics with traditional co-ops but are
different in three significant ways. “New generation cooperatives
are involved in value-added processing of the farmer's commodity,” Fulton
says. “The other differences have to do with the organizational
structure. In traditional cooperatives, if you want to get your
equity investment out of the cooperative, the cooperative has to
pay you out,” she says. “Also, in the new generation cooperatives,
the producers/owners can sell their shares—what we call ‘tradable
equity shares.'”

Last December, the first Extension publication from the New Vewntures
Team was published: ID-315, New Generation Cooperatives: What,
Why, Where, and How . www.extension.purdue.edu/extmedia/ID/ID-315.pdf .
The publication is an Internet guide of resources about the cooperatives
and is available at Purdue Extension county offices or online.

The New Ventures Team plans to develop other Extension publications
and programs in the months and years to come, says Jerry Nelson,
New Ventures Extension educator and co-chair. “We want to deliver
programs that help people understand the steps they'll go through
to start a venture in value-added agriculture,” he says. “Agriculture
is changing, and the New Ventures Team was formed to address those
changes.”

LaGrange County 's Clearspring Produce Auction has benefited from
its relationship with Purdue and the New Ventures Team, says Western. “We're
striving to be successful. We just need a little more oomph to
get over the top.”